The Ministry of Finance yesterday said it was not considering injecting fresh capital to stabilize the jittery local stock market despite growing worries about the persistent subprime mortgage problem in the US.
The ministry is in charge of the NT$500 billion (US$15.18 billion) National Stabilization Fund, which is used to prevent stock markets from tumbling because of non-economic factors.
The TAIEX plunged another 1.35 percent yesterday on concerns a global credit crunch would derail economic growth.
"The fund's committee does not plan to meet soon, meaning we are in no position to use the fund [to buy local shares] in the near term," said Deputy Minister of Finance Liu Teng-cheng (劉燈城), the executive director of the fund.
"We are closely monitoring the stock market and will mobilize the fund in accordance with the market conditions," Liu said.
Premier Chang Chun-hsiung (張俊雄) also called for confidence in the stock market and said the National Stabilization Fund would take "appropriate measures."
"I believe the National Stabilization Fund will make the most appropriate moves," Chang said in an e-mailed statement yesterday. "I hope all Taiwanese have firm confidence."
He didn't specify what measures might be taken.
The benchmark TAIEX ended 111.08 points lower at 8,090.29 yesterday, rebounding after bigger losses earlier in the session saw the benchmark index dip below the psychological 8,000-point level.
The decline of 1.35 percent yesterday, however, was smaller than the 4.56 percent loss on Thursday and Wednesday's 3.5 percent slump.
Turnover shrank slightly to NT$178.43 billion yesterday from NT$180.26 billion the previous day, the Taiwan Stock Exchange's data showed.
This week the TAIEX has dropped 9.42 percent, or 841.02 points in total.
Foreign institutional investors remained bearish, selling a net NT$29.36 billion in local shares yesterday and NT$98.17 billion over the past five trading sessions, the exchange's data showed.
Chunghwa Picture Tubes Ltd (中華映管), the nation's No. 3 flat-panel maker, United Microelectronics Corp (UMC, 聯電) and Fuhwa Financial Holding Co (復華金控) were the most actively traded shares, falling by 2.46 percent, 2.28 percent and 5.81 percent respectively.
Elsewhere, shares of the world's two biggest contract laptop computer makers, Quanta Computer Inc (廣達電腦) and Compal Electronics Inc (仁寶), advanced 3.59 percent and 0.62 percent on solid growth prospects for the second half.
"We prefer large-cap PC names such as Acer Inc, Asustek Computer Inc (華碩), Wistron Corp (緯創) and Compal," Lehman Brothers said in a report released yesterday.
Lehman Brothers raised its growth forecast for global notebook computer sales in the third quarter to 18.8 percent quarter-on-quarter, from its previous estimate of 15.4 percent.
Additional reporting by Bloomberg
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